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Today’s stock market action returned the S&P 500 to 1119 which is where it was on September 14, 2010, roughly two weeks after Dr. Bernanke’s Jackson Hole speech on August 27, 2010, in which he hinted at the launch of “QE2,” the Fed’s $600 Billion bond buying program.

So, nearly a year and $600 Billion later, it appears, sadly, that precious little of the “wealth effect” generated by QE2 now remains.

Today was quite a day by any standard, as the Dow lost 635 points, its sixth worst drop in history, and nearly equal to the 698 it lost over the course of last week.

Clearly, the downgrade of the U.S. credit rating didn’t go down well as investors around the world had their first chance to respond with heavy selling in every region and index.

Bank of America appears on the way to being “not to big to fail,” as it dropped some 20% to lead the financials way lower and now trades at microcap levels of $6 and change.

President Obama made a weak attempt to quell the panic and fear with an appearance that did little to quell either as he said, “No matter what some agency may say, we’ve always been and always will be a Triple-A country.”

Today saw the highest trading volume since the “Flash Crash” of last May and set a new one day trading record for options volume.

VIX, the “fear indicator,” spiked to 48, a level last seen in March, 2009, and oil dropped approximately 6% while gold climbed 3%.

Meanwhile, in Europe the European Central Bank intervened in the Italian and Spanish bond markets to prop them up and stop contagion in Europe and S&P continued on its rampage by downgrading Fannie Mae and Freddie Mac and other government bodies tied to the downgraded federal debt.

So, all in all, it was an exciting day for stock market and ETF investors.

Tomorrow brings the July NIFB Small Business Index, Second Quarter Productivity and Labor Costs, but, most importantly, at 2:15 p.m. Eastern time, the Federal Reserve Open Market Committee Statement after their August meeting.

World markets are hoping desperately that Dr. Bernanke and his colleagues can pull yet another rabbit out of their collective hat. However, I think their rabbit supply is limited and the first bunny of any significance won’t be seen until their September meeting because Dr. Bernanke has a history of very carefully telegraphing future Fed moves.

Of course, he could always shock us, as market action has shocked many investors over the last few weeks, and so we’ll just have to wait and see.

Recent stock market action has undone much of Dr. Bernanke’s work over the last year or so and it’s looking more and more like the notion of a “soft patch” in the economy is becoming a major migraine for him and the global economy.

It is our view that a double dip recession could very likely already be underway and “Mr. Market” is showing us what we can’t yet see.